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J Petrol Explor Prod Technol (2015) 5:241–254

DOI 10.1007/s13202-014-0131-0

ORIGINAL PAPER - PRODUCTION ENGINEERING

Improved oil recovery using CO2 as an injection medium:


a detailed analysis
Azeem Ghani • Faisal Khan • Vikram Garaniya

Received: 19 July 2013 / Accepted: 21 July 2014 / Published online: 26 August 2014
 The Author(s) 2014. This article is published with open access at Springerlink.com

Abstract The main goal of any improved oil recovery sensitivity analysis and optimizing the values of injection and
(IOR) is to displace the remaining oil in a reservoir; it is production increases the oil recovery and maximum sweep of
achieved by improving the volumetric efficiency and the reservoir. The economic analysis carried out on the
enhancing the oil displacement. Carbon dioxide is considered chosen optimum scenario 4 was found to be very economical
to have high potential to improve the production efficiency of with total savings of $173 M.
the reservoir. This process is gaining a lot of relevance these
days as one of the best IOR techniques because when CO2 Keywords Enhanced oil recovery  Risk analysis 
dissolves in heavy oil, it reduces the oil viscosity, increases Improved oil recovery  Reservoir simulation  CO2
the oil swelling, improves the gravity segregation of oil and injection analysis
the internal drive energy. Consequently, this improves the oil
recovery from the reservoir. Oil recovery using CO2 is a win/
win technique because it enhances the oil recovery and can Introduction
be used as a CO2 storage option in reservoirs to reduce the
greenhouse gas levels in the atmosphere. In the present study, Improved oil recovery (IOR) is an approach that allows the
the reservoir simulation is used to predict the reservoir’s recovery of oil from a depleted and high-viscosity oil field.
behavior using different production scenarios. A reservoir According to a report from (NETL (March 2010) in 2006,
model is constructed using Eclipse and is used to optimize IOR projects alone produced around 650,000 barrels of oil
the well. The objective of this study is to enhance under- per day. IOR operations account for almost 9 Million
standing of improved oil recovery for a typical reservoir metric tonnes of carbon, which is equivalent to 80 percent
located offshore on Australian continental shelf. The second of industrial CO2 every year. Twenty percent of CO2 used
part of this study focuses on carrying out an economic ana- for IOR operation comes from natural gas processing plants
lysis of the best IOR scenario, with the maximum oil and the majority of CO2 comes from underground.
recovery, by analyzing key variables, such as oil prices, Improved oil recovery processes using gas, is also known
capital costs, operation and maintenance costs, CO2 prices as capillary number increasing processes. This method is
and taxes. The results obtained indicated that proper well called miscible flooding. Gas drive is the use of energy that
optimization performed in high oil saturation areas using arises from the expansion of gas in a reservoir to drive the oil
out to a well bore. There are two types of gas drives, namely
condensing gas drives in which there is a mass transfer of
A. Ghani  F. Khan  V. Garaniya
intermediate hydrocarbon from the solvent to crude, and
NCMEH, Australian Maritime College, University of Tasmania,
Launceston, TAS 7250, Australia vaporizing gas drives in which mass transfer occurs from the
crude to the solvent. CO2, nitrogen and flue gas fall into this
F. Khan (&) category. These methods are based on the principles of
Safety and Risk Engineering Group, Faculty of Engineering and
increasing capillary number, which means reducing the
Applied Science, Memorial University, St John’s A1B 3X5,
Canada interfacial tension between the water and oil thus lowering
e-mail: fikhan@mun.ca the mobility ratio (Lake and Walsh 2008).

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The screening process for the selection of IOR involves This hypothetical study is based on a typical reservoir
gathering the reservoir data and comparing this with the located offshore on the Australian continental shelf using
screening criteria for various IOR methods. After narrowing CO2 as an injection medium. Improved oil recovery sce-
the choices, the evaluation of results is moved to the labo- narios were generated in the Eclipse reservoir simulation
ratory to investigate rock and fluid properties. Engineers and software and the scenario with the maximum oil recovery
geo-scientists use the available data to create reservoir at the end of reservoir life was chosen for an economic
models to simulate the effects of different IOR methods to analysis of that particular optimum scenario.
choose the optimal one. Pilot testing is performed to prove In the second part of the present study, carbon dioxide is
the applicability of gas for a certain reservoir and also to find chosen as the medium for improved oil recovery. A
out the field and operational problems which may arise. This detailed economic analysis on the chosen scenario is also
testing reduces uncertainty and risk and most importantly, it conducted on key variables, such as, oil prices, price of
helps to produce plans for large-scale field development. injectant (CO2), capital expenditures and operating costs.
This is very important as laboratory tests and studies may not
provide sufficient results. Because the pilot testing is nor- Methodology
mally operated in a different way to the field-wide applica-
tion, it is sometimes difficult to project the information to the Methodology followed in the present study is shown in the
field as a whole. In this model, the final drilling and com- steps below.
pletion activities, as well as the surface and transport facil-
ities are determined (Mungan 1982). Model development
One of the most important aspects in planning a proper
detailed plan for characterizing a reservoir is to identify the This step depends on the process that needs to be studied.
primary factors which will have a profound impact on the There are many reservoir models available within eclipse,
CO2 flooding. The scoping factors decide whether the CO2 such as miscible oil, black oil, thermal and compositional
flooding project will be economically and technically models and the nature of analysis and scope of the study
successful or should it be abandoned, if there is no financial determines which models need to be used. In the present
gain. Most important reservoir attributes which might study, black oil reservoir model is used because of its wide
cause technical and economical failure and engineer should application in the petroleum industry and also because it is
look into before starting a CO2 project are: thermodynamic far less demanding than a compositional simulator.
minimum miscibility pressure and the average reservoir For the construction of a model, the following steps
pressure, oil saturation to water flooding, reservoir heter- were followed:
ogeneity, gravity effects, the ability to inject and produce
• Quality controlling of the geologic model for errors and
fluids at economical rates and approximate operating plus
problems.
investments costs associated with the process (Jarrell et al.
• Scaling up the model.
2002).
• Simulation of the model for output.
The Implementation of a CO2 IOR project involves the
• Intersection of the reservoir wells with the model and
installation of a CO2 recycling plant, laying CO2 trans-
output simulation well data
portation pipelines, drilling and reworking of wells and the
• Output the production data in the form of simulations
purchase cost of CO2. Operators need to consider the total
and link to wells.
CO2 costs, in other words the cost of CO2 purchase and the
CO2 recycle cost, which can amount to around 25 to 50 The reservoir model, which simulates a heterogeneous
precent of the cost of oil per barrel. In addition, the other reservoir, is divided into 2,400 cells of multiple layers. The
costs involved are CO2 supply/injection, price of oil and black oil simulator is chosen for this. The grid size in the
infrastructure costs associated with the cost of carbon tax present model is (x, y, z) (20 9 15 9 8). The model is
emissions (NETL March 2010). simulated with Cartesian grid corner point geometry hav-
The selection of a suitable IOR depends on careful ing one reservoir with an aquifer. The numerical model for
selection of the reservoir and its characteristics. Once aquifer is defined in the grid section. The reservoir fluid
these questions are addressed then based on sound contains three phases namely gas, oil and water. The oil
technical analysis, a detailed reservoir model is devel- consists of live oil with a dissolved gas. The API tracking is
oped and economic analysis is conducted (Romero- used to track the oil gravities and an algorithm does the
Zerón 2012). Uncertainty in management is also a numerical diffusivity control. The residual oil in gas satu-
critical factor in reservoir simulation (Schlumberger ration is 0.1503 and residual oil in water saturation is
2013). A sound economical recommendations can only 0.19103. The average depth of the reservoir is 7,539 feet
be made after a detailed reservoir analysis is carried out. and average pressure is 3,721.2 psia. The grid block size

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depth in X, Y and Z direction are 1,273, 1,332 and 70 feet. determination of the best possible perforation method, well
The data inputs for the reservoir modeling are composed of patterns, number of wells to drill, and injection rates.
fluid and rock properties such as porosity, pressure and Uncertainty management is also a critical factor, where it is
permeability. The inputs in Eclipse office 100 are classified important to estimate the financial risk of exploration and
in the sections of case definition, grid section, PVT section, early life cycles fields (Schlumberger 2013)
SCAL, initialization and schedule section (Schlumberger The reservoir simulation used in the present study
2012). included the following steps:
1. Dividing the reservoir into several different cells.
Reservoir model simulation 2. Providing basic data for each cell.
3. Positioning wells within the cell.
Reservoir simulation is the study of fluid flow in a 4. Specifying the well production rates as a function of
hydrocarbon reservoir under production conditions. This time.
simulation predicts the behavior of the reservoir in differ- 5. Solving each cell simultaneously, so the number of
ent production scenarios and helps to understand the res- cells in the simulation model is directly related to the
ervoir’s geologic properties. It is important to simulate a time required to solve the time step.
reservoir for asset valuation to determine the recoverable 6. Specifying historical production rates.
reserves accurately and also for the asset management for 7. History matching.

Fig. 1 Field pressure plots for


first three scenarios and primary
depletion period Primary
Depleon
Scenario 1

Scenario 2
pressure in Psia

Scenario 3

Years

Fig. 2 Field oil production total


for first three scenarios and
primary depletion period
Dollar Million

Years

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Fig. 3 Oil saturation matrix at the beginning of primary depletion

a. Pressure matching. the life of the subject well. However, ‘‘ACTION’’ facility
b. Production matching. enables that if natural production of the oil wells falls
below some specified limit, all injection wells automati-
8. Sensitivity studies to be done at any stage of the
cally start injecting.
modeling process (appropriate)
The reservoir oil is produced from 10 wells namely (L1,
9. Predicting the future under varying operating
L2, L3, LU1, LU2, U1, U2, U3, U4, and U5). Water is
strategies.
injected around the edges of the reservoir through eight
wells namely (I1, I2, I3, I4, I5, I6, I7, I8) and the gas at the
Production profile development center using the well GI (the names of the water injection
wells start with the letter ‘‘I’’ to make the recognition
After running the simulation, the field pressure and total easier). Table 3 and Table 4 summarizes base cases for the
field oil production plots were generated for the first three injection and production well control parameters. There-
scenarios as shown in Figs. 1, 2. The x-axis in Fig. 1 rep- fore, to perform primary depletion, the wells for the
resents the number of years of simulation period whereas injection control parameters are kept shut in the schedule
the y-axis represents the pressure in psia. Similarly, in section of eclipse by performing following commands:
Fig. 2, y-axis represents the total revenue in Million Injection well control (I): Open/shut flag = Shut
dollars. Injection well control (GI): Open/shut flag = Shut
As shown in Fig. 1, the average pressure for primary
Primary depletion depletion was 3,800 psia in 2010 and it started to decrease
continuously till 2017 to 3000 psia, at which the production
To perform the natural depletion method, the gas and water ceases. Therefore, the primary depletion phase lasted for
injection wells are kept shut by changing the injection well 7 years of the total reservoir’s life. Figure 2 shows the total
control parameters. This action can also be performed for field oil production, which is 1.02 Million tonne at the end
well completion and specification data in the schedule of the primary production period.
section to meet the requirements of the injection. The Figure 3 illustrates oil saturation matrix at the beginning
action facility in the eclipse can also be used to set some of primary depletion, which shows that the oil saturation is
limit on rate, pressure or time, after which injection starts very high on the left side of the reservoir block. Figure 4
or paused/stopped automatically, at the specified limit. The shows the oil saturation matrix at the end of primary
action can be repeated for finite as well as infinite times in depletion period. In this figure, the orange zone at the left

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Fig. 4 Oil saturation matrix at the end of primary depletion phase

side of the block indicates considerable reduction of oil improved oil recovery produces an additional 1.23 M
saturation, but there is still original oil in place (OOIP) left tonnes at the end of oil recovery period.
inside the reservoir, which can be improved by gas injec- From the oil saturation at the end of scenario 1, it is
tion technique. found that there are few blocks surrounding the production
wells U3, U4 and U5, where the oil saturation is still high,
Scenario 1 therefore in the next scenario, the position of these oil
production wells is shifted to achieve the maximum sweep.
For scenario 1, the water and gas injection wells are opened
in the Schedule section, by changing the injection well Scenario 2
control parameters shown in Table 4. This parameter
remains the same for the first three scenarios and well From the oil saturation matrix of scenario 1, it was found
location is changed to gain more sweep efficiency and that there are still some unswept regions in the areas near
ultimately recovery performs well optimization. the oil production wells, which indicates that there is need
Injection well control (I): Open/Shut flag = Auto to optimize the location of oil wells U3, U4 and U5, located
Injection well control (GI): Open/Shut flag = Open in the maximum oil saturation zone. The locations of these
Well completion and specification parameters for oil wells are changed (as shown below) to obtain the maxi-
wells are mentioned in Table 2. This is base scenario for mum sweep efficiency and oil recovery from the given
these wells. The well oil production limits are set at 20,000 sector by changing the base line data given in Table 2 and
STB/day as shown in Table 3. The maximum gas to oil performing following commands:
ratio for scenario 1 was found to be 1.21 MSCF/STB. It is Well COMPLETION AND SPECIFICATION
obvious from Fig. 1, that the injection of gas raises the WELL U3: x grid = 9, y grid = 14
sector’s reservoirs pressure by 400 psia in 2016, as com- WELL U4: x grid = 5, y grid = 9
pared to reservoir pressure of natural depletion period and WELL U5: y grid = 8, y grid = 3
this pressure further sustains till 2019 and additional oil is The oil production from these wells lasted 2010 to 2018.
recovered. Higher injection rates cause higher average The results from this scenario is summarized in Fig. 2.
sector pressures. The oil production from these wells lasted After changing the position of these wells, the GOR
from 2010 to 2019 as shown in Fig. 2. From Fig. 2, it is increases to 1.23 MSCF/STB, this decreases the field
obvious that reservoir’s life extends by 2 years and pressure to 50 psia as compared to scenario 1, shown in

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Fig. 1. This is unproductive for the reservoir, as the natural higher the drawdown and the more will be the oil recovery.
energy for the reservoir reduces. This effect can also be The same principle is applied to THP as well, however, if
seen in the field oil production plot, in Fig. 2. The field oil the THP decreases and BHP increases, this indicates liquid
production reduces to 500,000 STB as compared to sce- load up in the well. Therefore, in the scenarios 4, these two
nario 1 and consequently the oil recovery period lasted for controlling factors are optimized. Table 3 and Table 4
8 years for this scenario as compared to 9 years for sce- provide details on injection well control parameters. It can
nario 1. The oil saturation matrix at the end of recovery be seen that the well control parameter (I) is controlled by
period showed that there are still unswept wells U4, U3, U1 the tubing head pressure (THP) and well control (GI) is
and U2. The comparison of the present scenario with the controlled by the reservoirs rate.
previous scenario showed that there was an abrupt change
in the GOR. When GOR increases the field pressure Optimization of BHP
reduces, this greatly affected the field oil production.
In this sub section, BHP of the wells was changed to a
Scenario 3 minimum BHP (500 psia), for all the production well
parameters from the base values but the same values of
In this scenario, the positions of oil production wells U3, THP for the injection and production well control param-
U4 and U5 were kept same as of scenario 2 and the posi- eters were used. It was found that the field pressure and
tions of oil production wells L1, L3 and LU2 (as shown GOR did not change as compared to scenario 3. The field
below), located on the right side of the sector in the high oil pressure and field gas oil ratio also remained the same and
saturation areas were optimized to obtain the maximum did not affect the total field oil production and field pres-
sweep efficiency and oil recovery from the given sector. sure. Decreasing the BHP had no effect on the oil pro-
Following commands were performed: duction on this scenario which means that the base values
Well COMPLETION AND SPECIFICATION of BHP are correct.
WELL L1: x grid = 12, y grid = 12 In this step, the BHP values for all the production wells
WELL L3: x grid = 16, y grid = 11 were increased to 2,400 psia from the base value of BHP
WELL LU2: x grid = 15, y grid = 12 (2,000 psia) and base values of THP for injection and
The results obtained from this scenario showed a very production well control parameters shown in Table 3 and
good sweep efficiency and oil recovery by optimization of Table 4 were used. It is found that these changes increased
well location in the high oil saturation areas. Figure 1 the field pressure only by 60 psia from 2014 onwards as
shows the pressure plot for this scenario. After well opti- compared to scenario 3. The field GOR almost remains the
mization, the field pressure drop in 2017 was 3,400 psia, as same at 1.12 MSCF/STB, therefore this scenario did not
compared to the previous scenario, where the pressure provide a good solution of the problem as the total field oil
dropped in 2016. There was also a reduction in GOR by production also reduced to 200,000 STB. There is also an
0.08 MSCF/STB as well. This reduction in GOR increased abrupt change in the average field gas production rate of
the reservoir pressure and it greatly affected the oil 120,000 STB/day, therefore the base value of BHP 2,000 is
recovery as shown in Fig. 2. The oil recovery is improved considered and in the next scenarios THP is used as a
by 500,000 STB at the end of the period as compared to control mode for injection and production well control
scenario 1. This indicates very good displacement parameters. This scenario proves that very high BHP from
efficiency. the base values of production well control parameters
results in low oil recovery and ultimately low sweep,
Optimization of BHP and THP on scenario 3: scenario causing an increase in field pressure and field gas pro-
4 duction rate.

This section emphasizes on optimizing the values of pro- Optimization of THP


duction and injection parameters of the optimum scenario
by improving the oil recovery factor and maximum sweep To optimize the THP, the base value of BHP used is the
for the reservoir. Tubing wellhead pressure (THP) and optimum value for the given well locations. The THP
bottom-hole pressure (BHP) are used to control the draw- values for the injection and production well control
down of reservoir. BHP corresponds, where operator has parameters in Table 3 and Table 4 are changed to get an
installed control valves (subsurface), otherwise well head overall increase in oil recovery and drawdown from the
pressure (WHP) is used as a control mode. BHP is denoted reservoir. The following changes are made.
by pwf (flowing bottom-hole pressure) or pws (shut in WCONPROD (WELL U, L, U1, U2, LU1)
pressure). According to Darcy law the lesser the BHP, the THP: 70 Psia

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Fig. 5 Field oil, water and gas production rates on THP parameters (Scenario 3)

WCONINJE-INJECTION WELL CONTROL (I) affected the field oil production rate and the oil production
THP: 900 Psia increased by 200,000 STB as shown in Fig. 7 as compared
Figure 5 is a testimonial of the fact that by reducing to scenario 3 in Fig. 2.
THP too low increases the drawdown from the reservoir As shown in Fig. 8, this scenario provides the maximum
and ultimately increases the flow rates as well; since, in this oil recovery by optimizing well location and also per-
case, the field gas production rates increase to 120,000 forming sensitivity analysis on BHP and THP values. This
STB/day. The field pressure also dropped by 50 psia as scenario is further considered as a source for improved oil
compared to scenario 3 because of an increase in draw- recovery using CO2 as injection gas. In subsequent section,
down from the reservoir. This resulted in a very low oil economic analysis of IOR is presented.
production from the reservoir and the oil production
dropped to 400,000 STB as compared to scenario 3.
This is the optimization result of scenario 3 referred here Economic analysis
as scenario 4 here on. In the next scenario, the values
mentioned below for THP are used. The objective of the present economic analysis is to pro-
WCONPROD (WELL U, L, U1, U2, LU1) vide a mechanism to evaluate the cash flow and gain during
THP: 100 Psia the production life of the reservoir using CO2. This study is
WCONINJE-INJECTION WELL CONTROL (I) based on certain assumptions summarized below.
THP: 1,200 Psia The main assumptions related to costs in the present
study are:
• Price of CO2 and oil is considered constant throughout
Analysis of scenario 4
the study period.
• 10 % depreciation rate is considered.
As illustrated in Fig. 7, the values of the THP have an
• 7.33 Barrels of oil is considered equal to one tonne.
effect on the overall oil recovery. The drawdown from the
• 18.9 Mscf of gas is considered as one tonne of injected
reservoir becomes stable and the production rates fall back
CO2.
to the original value of 100,000 STB/day for the oil and gas
production rates as shown in Fig. 6. The field gas oil ratio Oil recovery estimation is based on the reservoir
is found to be 1.16 MSCF/STB and field pressure drop is parameters of pore volume, oil saturation, past recovery
20 psia in 2017 as compared to scenario 3. This greatly techniques etc. The estimation of price depends on the cash

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Fig. 6 Field oil, water and gas


rates on THP parameters
(Scenario 4)

Fig. 7 Field oil production total on THP parameters (Scenario 4)

inflows and cash outflows. Cash inflows depend on the oil compressor, pipe line, wells and capture facility plant. The
production generation while cash outflows are generated by model includes operation and maintenance (O&M) costs of
the operation, investments, maintenance, field development the lifting fluids for recycling the reproduced gas plus
expenditures and other costs. A detailed IOR cost model is general and administrative costs. The model also accounts
developed by the study of financial assumptions. These for the operation costs involved with CO2 operation, roy-
include capital costs relating the costs incurred by the alties, severances and ad valorem taxes.

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Fig. 8 Oil saturation matrix on THP parameters (Scenario 4)

Operation costs General administrative costs

CO2 transportation and capture cost These are added as 20 % of the lifting costs and operation
and maintenance costs for CO2 recycling (Melzer 2006).
The transportation cost varies from project to project, but
according to the literature review and by National CO2 IOR tax incentive
enhanced oil recovery initiative (NEORI) participant sur-
vey, cost for the transportation involved with IOR is in the Oil produced from an approved IOR project is eligible for a
range of $5 to $20 per tonne, with an average cost of $10 special IOR tax rate. According to NEORI, the represen-
per tonne (NEORI 2012). This price is also confirmed by tative price for IOR incentive is from $5/tonne for an
the study carried out in China for the assessment of CO2 industrial-low cost tranche to $37/tonne for industrial high
IOR in Caoshe oil field in Subei basin which is $0.6/Mscf cost and power plant tranche, with an average price taken
(Shaoran 2007). The capture costs of CO2 vary with the as $20/tonne (NEORI 2012).
source with an average price for CO2 capture operation to
be $20/tonne. Another study carried out on Caoshe oil field Allocation of taxes
for the economic analysis of CO2 enhanced oil recovery
and storage, calculated the cost in the range of $15–40/ According to a study carried out by CO2 IOR from Permian oil
tonne, with an average price of $20/tonne (Shaoran 2007). basins, developed by the advanced resources, allocates the taxes
for royalties, Severance taxes and Ad Valorum taxes as 12.5, 2.3
Operation and maintenance cost of CO2 recycling and 2.1 %, respectively (Shaoran 2007). The same values for
the allocation of taxes are considered for the present project.
According to a study carried out on Permian oil basins, the
operation and maintenance for CO2 recycling are indexed Capital costs
as $0.13/Mscf or $2.45/tonne (Melzer 2006).
Lifting costs: The lifting costs, which include liquid Cost of CO2 capture facility
lifting, transportation and reinjection are calculated on the
total liquid production costs and are priced as $0.25 per There are different methods for capturing CO2 from flue
barrel or $1.832 per tonne (Melzer 2006). gases. One of the methods is a chemical absorption method.

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A company in china carried out a pilot test to capture 3,000 Table 1 Results of IOR cost model
tonnes of CO2 per year from a power station in Beijing, their Parameters Million
capturing costs were in the region of $2.94 Million. tonnes
According to assumptions, 1 tonne of CO2 equals to 18.9 Total oil produced 2.34 Mt
Mscf. Therefore, 18,000 tonnes of CO2 injected per year Total CO2 injection 0.169 Mt
would cost approximately $17 Million (Shaoran 2007). Total CO2 production/CO2 recycled 0.873 Mt
Parameters Million
Pipe line costs dollars
Total net revenues (royalty taxes etc.) $36
Petro China estimated the costs associated with pipelines Total CO2 price $5
for the Caoshe oil field to be approximately $0.018 Mil- Total capital costs $28
lion/km, by taking an approximate distance of 100 km Total operation and maintenance costs $12
from the oil field to the city for the present project, the cost Total gross revenues @ $95/tonne $223
of the pipe line is $1.8 Million (Shaoran 2007). Total carbon credit/IOR incentive $3.39
Total gross revenues for CO2 IOR including carbon $226
Compressor cost credit
Total capital/O&M/Taxes for CO2 IOR $68
Two compressors are normally required for the project. Total profit over the life cycle of the CO2 IOR $173
The cost of compressor is approximately $1.18 M. Nor-
mally the installation and transportation cost covers 40 %
of the total cost of the compressors. Therefore, the total depletion. Total water production calculation is also
cost of the compressor would be $1.65 M (Shaoran 2007). important for the costs associated with the lifting costs, as
pumps are required to lift oil and water from the production
Cost of new wells well to the facility. Gross revenue is generated using the
price of oil as $95/tonne. Federal and state governments
The cost of well drilling is around $147.1/m, the well depth enjoy total net revenue of $36 M, which is deducted from
required for the wells is between 2,000 and 3,000 m. Since the gross revenues. Capital costs involved the capture
there are 19 wells, the cost of these wells is approximately facility, pipeline, compressor and cost of wells, these costs
$7 M for an approximate depth of 2,500 m (Shaoran 2007). constituted $28 M. The purchased CO2 constitutes the
price of capture operation, compression and transportation
and was found to be $5 Million at the end of oil recovery
Results period as shown in Table 1. This is also known as the total
CO2 price. The total operation and maintenance costs
The IOR cost design ties as close as possible to the data for consisted of lifting operation, general administrative and
the scoping analysis of IOR on a typical reservoir located maintenance costs for CO2 recycling were $12 M as shown
offshore in Australian continental shelf (the data for the in Table 1. $20/tonne was allocated as a special IOR tax
economic analysis are used from CO2 storage project in rate for the amount of CO2 injected. This amount was
Caoshe oil field, Subei basin (China), National enhanced added to the gross revenues at the end of IOR period, which
oil recovery initiative (NEORI) and Permian oil basins is $226 M as shown in Table 1.
developed by advanced resources) to make use of the cost The total project costs for the carbon dioxide IOR was
model. Apart from comparison purposes within the petro- $68 Million for the first year, these expenses constituted
leum industry, the data are also used to assess the economic total net revenue, total capital costs, total CO2 price and
impacts of specific policies and plans. These costs included total operation and maintenance costs. 10 % tax was
the CO2 equipment costs, cost of new wells, compressor deducted from the first year for a period of 9 years for the
cost, pipe line costs, CO2 transportation and CO2 capture rest of reservoirs production life. Total amount of oil
costs and capital costs. The model is based on the improved recovered by IOR was 2.34 M tonnes. The table below
oil recovery calculations; the total oil produced is calcu- shows the results obtained from the cost model.
lated by subtracting the maximum oil produced from the
chosen scenario, by the oil produced from the primary oil
recovery. Similarly, the total CO2 injection values consti- Discussion
tute only from scenario 4, as there was no CO2 injection for
the primary depletion phase. Total CO2 production is found At the beginning of the project, due to high capital
by subtracting the CO2 produced for IOR and primary costs for IOR, the project losses were $68 M, as shown

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Fig. 9 Revenue verses costs Revenues verses costs


plot

Dollar Millions Number of Years

in Fig. 10. When the improved oil recovery started Conclusions


from 2011 onwards and also because of the removal of
high end capital costs, the total profits for the project 1. Among different scenarios investigated, best perfor-
started increasing on the yearly basis as shown in mance in oil recovery is produced by Gas injection
Fig. 10. scenario because of its miscibility effects. This
A key component of the IOR field is the compressor, as observation is consistent with other studies, i.e., Go-
it requires a larger amount of energy and capital invest- zalpour reported approximately one tonne of CO2
ments, including the high end capital costs for the capture injected can produce 2.5–3.3 STB of oil (Gozalpour
facility. The CO2 capture cost depends on the technology et al. 2005). Present study results show 13.7 STB of oil
used and is likely to remain static overtime, but the costs production per tonne of CO2.
fall rapidly when the technology matures. Secondly, the 2. Proper well optimization in high oil saturation areas
cost of pipelines and transportation costs can also be of the reservoir increases the oil recovery and
reduced if the capture plant is located within the close maximum sweep as GOR and reservoir pressure
distance of the IOR site. improves. By performing sensitivity analysis and
When evaluating a proposal, one has to look at the optimizing the injection and production parameters,
cash flows in relationship to today’s dollars. The dif- it is observed that THP and BHP produce more
ference of the cash inflows and cash outflows (total drawdown from the reservoir. Consequently, the field
investment on a project) is known as the Net Present production rates, gas oil ratio and field pressure
Value. The NPV is calculated with a 10 % discount improves sweep efficiency.
factor for each year; the total present value of the cash 3. The economic analysis carried out was found to be
inflows generated for the period of 9 years is subtracted very economical, which was $173 M. There were
from the first year to give the final NPV. A positive high project costs at the beginning of the project due
NPV indicates that the project is profitable and a to high capital costs for the operation, but when the
negative value indicates that the project is not profit- IOR operation started, gross revenues ($) were
able and the value is discarded. It was observed that generated, which considerably reduced the total
higher oil price with 10 % discount provide maximum capital/operation and maintenance costs. Project eco-
profit. nomics improved with high oil prices, improved oil
recovery technology, low cost of gas injection,
Project profits improvement of the tax structure (low royalty,
severance and Ad Valorum tax rates). The financial
The reservoir production life lasted from 2010 to 2019. feasibility of the IOR also depends on the policies
Figures 9 and 10 illustrate that the CO2 IOR project adopted for considering the cost values of the gas
started generating revenues after 0.6 years from pro- associated with the IOR. The economics of these
duction period. Based on the cost model generated in projects will improve during the passage of time.
the present study, this is also the payback period, as the 4. Furthermore, for CO2 IOR offshore projects, improve-
profit only accounts for the oil produced by the ments were required to overcome the challenges
improved oil recovery alone. related to insufficient reservoir characterization, large

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252 J Petrol Explor Prod Technol (2015) 5:241–254

Fig. 10 Total profit for carbon Total Profit for CO2 EOR
dioxide improved oil recovery
Total Profit for CO2 EOR

Dollar Millions
Number of years

well spacing, equipment needed to handle CO2 and the 4. The CO2 IOR offshore, provides some challenges, this
life span of offshore structures. include, insufficient reservoir characterization, large
well spacing, equipment needed to handle CO2 and the
life span of offshore structures.
5. The IOR experience has shown that the perfor-
Future Challenges
mance of CO2 IOR is good if low cost gas source
is used. Typical recovery factors are in the range
1. Proper reservoir characterization is a main challenge
of 50–60 % of OOIP (Original oil in place),
for Gas injections IOR and improper reservoir char-
therefore, there are very few economic barriers
acteristics causes poor sweep. Reservoirs with very
related to onshore IOR projects. There are chal-
low permeability or very high are also a poor candidate
lenges related to offshore CO2 IOR projects, as
for CO2 flooding. CO2 injection losses are also expe-
there are added costs involved for CO2 separation,
rienced with reservoirs with high concentration of
transportation, costs related to adapting platforms
vertical fractures (Gozalpour et al. 2005).
and well completions to handle CO2 (Gozalpour
2. The principle of IOR can be applied to the offshore
et al. 2005)
fields but the distance between the offshore wells is
6. Another economic barrier related to CO2 IOR for
often greater than the onshore wells. This extends the
offshore fields is the problem arising due to high
time for IOR initialization and produces unmeaningful
levels of corrosion. It is possible to replace some
results. This complicates the process and limits the
parts of the offshore platform when corrosion
IOR techniques that may be applicable. Well spacing
occurs, but the cost of doing so is very high even
is an important factor which can optimize CO2 IOR,
if inhibitors are used to protect some parts of the
the greater distance between the wells reduced the
system, while the other parts which are corroded
sweep efficiency (Nelms and Burke 2004). This in turn
still have to be replaced.
can affect the project economics and/or decrease or
increase the CO2 IOR.
3. Furthermore, for the offshore IOR operations, the risks Acknowledgments I would like to express my sincere appreciation
and thanks to Schlumberger Australia for providing ECLIPSE reser-
of IOR and safe CO2 storage due to possible insuffi- voir simulation software, it would have been impossible to undertake
cient reservoir characterization need to be evaluated. this thesis without their help. I would also like to thank Mr.Warrick
The questions which need to be answered are: (1) how Burgees (Systems Manager—IT services) for his amazing IT support.
long the CO2 IOR project can be operated in the
Open Access This article is distributed under the terms of the
offshore field and (2) can CO2 be injected for storage Creative Commons Attribution License which permits any use, dis-
after stopping the IOR operation (Gozalpour et al. tribution, and reproduction in any medium, provided the original
2005) author(s) and the source are credited.

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J Petrol Explor Prod Technol (2015) 5:241–254 253

Appendix Table 3 Production well control parameters (WCONPROD)


Production well control parameters
Please see Appendix Tables 2, 3, 4.
Production well control (U)
Oil rate 20,000 stock tank Barrel/day
Water rate 20,000 stock tank Barrel/day
Table 2 Well completion and specification parameters (COMPDAT) Gas rate 20,000 Mscf/day
Liquid rate 30,000 stock tank Barrel/day
Well location for oil wells
Reservoir volume rate 50,000 rb/day
Well (LU1) BHP target 2,000 Psia
‘‘x grid’’ Location 14 THP target 200 Psia
‘‘y grid’’ Location 8
Production well control parameters
Well (LU2)
Production well control (L)
‘‘x grid’’ Location 13
Oil rate 20,000 stock tank Barrel/day
‘‘y grid’’ Location 10
Water rate 20,000 stock tank Barrel/day
Well (U1)
Gas rate 20,000 Mscf/day
‘‘x grid’’ Location 14
Liquid rate 30,000 stock tank Barrel/day
‘‘y grid’’ Location 6
Reservoir volume rate 50,000 rb/day
Well (U2)
BHP target 2,000 Psia
‘‘x grid’’ Location 17
THP target 200 Psia
‘‘y grid’’ Location 8
Well (U3) Production well control parameters
‘‘x grid’’ Location 9 Production well control (U1)
‘‘y grid’’ Location 13 Oil rate 20,000 stock tank Barrel/day
Well (U4) Water rate 20,000 stock tank Barrel/day
‘‘x grid’’ Location 6 Gas rate 20,000 Mscf/day
‘‘y grid’’ Location 9 Liquid rate 30,000 stb/day
Well (U5) Reservoir volume rate 50,000 rb/day
‘‘x grid’’ Location 9 BHP target 2,000 Psia
‘‘y grid’’ Location 4 THP target 200 Psia
Well (L1)
Production well control parameters
‘‘x grid’’ Location 12
Production well control (U2)
‘‘y grid’’ Location 11
Oil rate 20,000 stock tank Barrel/day
Well (L2)
Water rate 20,000 stock tank Barrel/day
‘‘x grid’’ Location 10
Gas rate 20,000 Mscf/day
‘‘y grid’’ Location 9
Liquid rate 30,000 stb/day
Well (L3)
Reservoir volume rate 50,000 rb/day
‘‘x grid’’ Location 12
BHP target 2,000 Psia
‘‘y grid’’ Location 6
THP target 200 Psia

Production well control parameters


Production well control (LU1)
Oil rate 20,000 stock tank Barrel/day
Water rate 20,000 stock tank Barrel/day
Gas rate 20,000 Mscf/day
Liquid rate 30,000 stb/day
Reservoir volume rate 50,000 rb/day
BHP target 2,000 Psia
THP target 200 Psia

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254 J Petrol Explor Prod Technol (2015) 5:241–254

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